GBP/USD Price Forecast – British Pound Continues to Struggle at Highs

The British pound initially tried to rally during the trading session on Tuesday but gave back the gains as the area above at the 1.3750 level continues to loom large as far as resistance is concerned. This is a market that has been grinding sideways in general, at least over the last couple of weeks. It had initially shot much higher, but I think at this point there are a lot of questions as to whether or not we can simply shoot straight up in the air from here. There is an argument to be made for owning the British pound, not the least of which of course is the fact that the coronavirus fights in the United Kingdom seems to be going much better than other places.

GBP/USD Video 03.02.21

The British pound is historically cheap, even after the massive rally that we have seen, so that is something worth paying attention to. Nonetheless, it does not mean that we need to shoot straight up in the air and quite frankly the way that the market has been trading as of late it does look like we are running out of momentum anyway. I suspect that a pullback towards the 1.35 handle is more likely now than it was a week ago, but that level is of course backed up by the idea of the 50 day EMA being just above it now. I have no interest in shorting this market, at least not yet, but I do recognize that things could change if we break down below the 1.35 handle.

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